In search of the next great customer experience

By: Al Dominick, president for Bank Director

May 16th, 2011 |

In the mid-to-late ‘90s, when companies like InteliData were promoting online bill payment and presentment technologies, I was introduced to a wave of industry optimism that such technologies would dramatically improve our overall banking experience. While the adoption cycle for online banking proved far longer than many forecast, history may be repeating itself. Indeed, we are in another period of technological exuberance, albeit mobile in nature.

Given our growing love affairs with mobile devices of all shapes, sizes and underlying technologies, it’s really no surprise that mobile banking continues to transform the way people manage their finances. Now, I realize I’m just one of many sharing this perspective; indeed, far more experienced voices, such as Fiserv's CEO Jeff Yabuki, has been known to tweet out thoughts like this:

(*April 30, 2011)

Much like the pre-IT bubble days of online banking, I’m inundated with promotional materials from tech vendors promising to enhance the experience of a bank’s customers while reducing an institution's costs.

Ah, the promise of mobile banking. All upside, right? Well, the Boston-based Aite Group offers an interesting counterpoint. Last month, the research and advisory firm published its analysis of the group's mobile banking consumer behavior survey. Its big takeaway: Banks will have to make significant investments to improve or develop their mobile marketing capabilities based on:

The lack of retention benefits from the mobile banking channel;

Potential losses of overdraft fees from balance monitoring; and

Shift in consumer attention towards mobile banking capabilities.

Juxtapose Aite's observation with a recent TowerGroup forecast. There will be 53 million mobile banking users by 2013, which represents an annual growth rate of more than 50 percent. Clearly, this is a huge opportunity for financial institutions to use mobile banking as a growth strategy. According to FIS, another leading technology firm in our industry, those institutions that are not waiting on the sidelines are benefitting in a number of ways:

Attracting new market segments;

Reducing operating costs;

Creating brand differentiation;

Deepening account relationships;

Increasing satisfaction and loyalty; and

Generating revenue.

Despite the promise of these benefits, far more financial institutions have yet to go mobile. For those who haven't, what are you waiting for? And no, this is not a rhetorical question. We'd like to know as we prepare to roll out our new digital platform for the financial community next month, so we might better help you understand the benefits and drawbacks of products and services.

Bonus question: How often does your board hear from your CIO, head of Transaction Services, Mobile Banking and/or Internet Banking? I’ve posted this question on our LinkedIn group so feel free to chime in there or leave a message below.

Al Dominick is the President for Bank Director, an information resource for directors and officers of financial companies. He writes about mobile banking, growth, social networking, key industry events and metrics. You can follow him on Twitter @aldominick, connect via LinkedIn or follow his About That Ratio blog.